WALTHAM, Mass., Nov. 13, 2018 (GLOBE NEWSWIRE) -- Great Elm Capital Corp., (NASDAQ: GECC), today announced its financial results for the quarter ended September 30, 2018.
FINANCIAL HIGHLIGHTS(1)
- Net investment income (“NII”) for the quarter ended September 30, 2018 was approximately $2.7 million, or $0.25 per share, equating to 1.0x distribution coverage for the quarter. For the nine months ended September 30, 2018, we generated $1.19 per share in NII vs. approximately $0.75 per share in distributions paid ($0.083 per share per month), representing nearly 1.6x distribution coverage YTD.
- In November 2018, the Board of Directors (the “Board”) set monthly distributions of $0.083 per share for the first quarter of 2019, representing a yield of approximately 8.3% of September 30, 2018 net asset value (“NAV”).
- Net assets on September 30, 2018 were approximately $127.8 million. NAV per share on September 30, 2018 was $12.00, as compared to $11.79 per share on June 30, 2018.
- We had approximately $898 thousand of net realized gains during the quarter ended September 30, 2018, or approximately $0.08 per share, and net unrealized appreciation of approximately $1.3 million, or approximately $0.12 per share.
- During the quarter ended September 30, 2018, we invested approximately $39.0 million across eight investments(2), including two new portfolio investments. During the quarter ended September 30, 2018, we monetized approximately $38.0 million across 17 investments (in part or in full(3)).
“This quarter marked the first full quarter since inception in which the Avanti third lien notes, which were converted to equity, did not generate any net investment income. Despite that, we successfully covered our distribution from NII for the eighth consecutive quarter,” remarked Peter A. Reed, GECC’s Chief Executive Officer. “On a year to date basis, we have covered our distribution by approximately 1.6 times, highlighting our team's ability to identify attractive investments with significant total return potential.”
PORTFOLIO AND INVESTMENT ACTIVITY
As of September 30, 2018, we held 29 debt investments across 23 companies, totaling approximately $190.2 million and representing 85.6% of invested capital and 93.6% of the fair market value of investments. First lien and/or senior secured debt investments comprised 100.0% of the fair market value of our debt investments as of the same date. As of the same date, we had four equity investments, totaling approximately $13.0 million and representing 6.4% of the fair market value of investments.
As of September 30, 2018, the weighted average current yield on our debt portfolio was 11.6% with approximately 56.6% of invested debt capital, as measured by fair value of investments at quarter end, in floating rate instruments.
During the quarter ended September 30, 2018, we deployed approximately $39.0 million(2) into eight investments (two new companies, six existing portfolio companies). The weighted average price of the deployment activity was 89% of par, carrying a weighted average current yield of 10.99%. All of these investments are first lien and/or senior secured investments.
During the quarter ended September 30, 2018, we monetized 17 investments, in part or in full, for approximately $38.0 million(3), at a weighted average current yield of 8.99%. Our weighted average realization price was 100% of par.
LEGACY FULL CIRCLE PORTFOLIO
In the two years since the Full Circle Capital Corporation (“Full Circle”) merger closed, we have been diligently focused on monetizing the legacy portfolio. During that time, we have exited 23 positions across 15 portfolio companies realizing an aggregate total return of $4.6 million on these positions, which represents 109% of NAV, a significant achievement given the market’s previous assessment of this portfolio.
CONSOLIDATED RESULTS OF OPERATIONS
Total investment income for the quarter ended September 30, 2018 was approximately $6.2 million, or $0.58 per share. Net expenses for the quarter ended September 30, 2018 were approximately $3.5 million, or $0.33 per share.
Net realized gains for the quarter ended September 30, 2018 were approximately $898 thousand, or $0.08 per share. Net unrealized appreciation from investments for the quarter ended September 30, 2018 was approximately $1.3 million, or $0.12 per share.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2018, available liquidity from cash and money market investments was approximately $5.3 million, exclusive of our holdings of United States Treasury Bills. Total debt outstanding as of September 30, 2018 was $79.0 million, comprised of our 6.50% senior notes due September 2022 (NASDAQ: GECCL) and our 6.75% senior notes due January 2025 (NASDAQ: GECCM). Our asset coverage ratio was 258% and our debt to equity ratio was 0.62x.
SUBSEQUENT EVENTS
Distributions:
In October 2018, our Board set the monthly distributions for the first fiscal quarter of 2019 at a rate of $0.083 per share. The distribution schedule, including record date and payment date, will be established by GECC pursuant to authority granted by the Board and communicated to stockholders in December 2018.
Our distribution policy has been designed to set an annual base distribution rate that is covered by NII. From time to time, as catalyst-driven investments are realized or when we out-earn our declared distributions, we may supplement monthly distributions with special distributions from NII generated in excess of the declared distributions(4).
About Great Elm Capital Corp.
Great Elm Capital Corp. is an externally managed, specialty finance company focused on investing in debt instruments of middle market companies. GECC elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. GECC targets special situations and catalyst-driven investments as it seeks to generate attractive, risk-adjusted returns through both current income and capital appreciation.
